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Call Walls Tested-Apr 5, 2021

MARKET COMMENTARY – Outlook – bullish breakout continuation. Retest required. Traders have built a ton of volatility into the pricing of oil this week. Pullbacks remain buying zones into the option call sellers again near 4050 and zero gamma at 3940. Again, pullbacks are buying zones but this breakout will likely retest frontline support.

Observations

  • Dollar stalls but holds higher support and gold continues its bounce
  • Employment situation on Friday but ADP numbers are bullish ahead of the number
  • VXO fails 18
  • Positive gamma territory holds into 3940 but 3950-3960 is support
  • Oil breaks 60 – but the pressure to push forward remains
  • Robust job report
  • Traders are bullish and expectations of new highs continue
  • Vaccine passports continue to be pushed forward as required for international travel
  • GoldmanSachs to offer bitcoin to high-net-worth clients
  • Bitcoin breakout above 60K and fails- holding here moves us higher
  • Facebook leak of 500 million users over the weekend
  • Gamestop offers of $1B stock sale in the making

The pressure for buyers to hold over 3989 today is quite important. We are quite far away from that as it goes right now.

When we see news about the bond markets, we need to keep on high alert. Remember that credit rules the world; however, the media shapes the narrative of what is happening, so pay attention to price action first- not what the media is painting.

As always, we will listen but not assume the news will do something- it remains important to follow quickly and not predict.

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4HR CHART

If you are newer, read The OODA loop. If used properly, it will confirm you are seeing things the right way. It is far better to be out of a trade you wish you were in than being in a trade you wish you were not. Stay present and in the near term, and pay attention to the players before you decide on a plan. BE PATIENT AND WAIT FOR YOUR PRICES to give you the edge. Intraday formations are the ones governing the charts – so use them.

Remember your OODA loop – OBSERVE, ORIENT, DECIDE, ACT

  • What do you see?
    • This means -what is the current battle at play?
  • Where were the buyers last engaged if they were value buyers?
    • This means -where do we see the congestion that leads to a bounce?
  • Where were the sellers last engaged if they were value sellers?
    • This means – -where do we see the congestion that leads to a fade?
  • Who won the last strategic price battle- buyers or sellers?
  • Have we tested significant levels of support or resistance?
  • What is the relative trend?
    • This means – relative to the day at hand, who is forcing the most pressure on price?
  • Have you established risk relative to –
    • 1) the last battle won and
    • 2) the relative trend?

PAY ATTENTION TO YOUR STOPS.

Watch the VWAP to help you with the strength of pressure. The loss of the VWAP will force some selling action, and the breach above the VWAP that holds will bring buyers to attempt stronger positioning.

INTRADAY -Keep an eye on the daily resistance and support that we discussed and expect battles at these regions as buyers have a lot to prove to maintain bullish price flow on monthly formations- technical damage is present but likely to be repaired on this large time frame. BIG time frames will help you position with the wind at your back.

Deep dips remain staging grounds for buyers- quick strikes to support and back to resistance appear to be the highest probability for success today- dips could certainly get deeper and spikes could get higher as price action shifts.

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This week’s calendar

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Econoday Calendar for this week

********If you feel you need some help understanding how price moves, remember you have the COACH’S CORNER for video review.

THINKORSWIM USERS –Chart share links for ES_F , NQ_F , YM_F , CL_F , GC_F – levels here for download to the ThinkorSwim platform-to be updated later today

LINK FOR THE TRADING DATA EXCEL SPREADSHEET

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TRADING LEVELS-REMAIN THE SAME

If you find yourself being chopped up, widen your time frame or take time away from your screens. This is a time when less is more.

TRADING VIEW & ACTION PLAN
Pullbacks can be deep-once support lines get lost – the lines will shift. Buyers have resumed some dominance.

Intraday LONG trading from support edges like ABOVE the RISING VWAP or tight moving averages will give you the least risk event for engaging – removing your trade at resistance will allow you to participate in level-to-level trading – understanding that countertrend bounces can be swift and sharp but will likely fail under the broken structure of the market.

Intraday SHORT trading from resistance edges like BELOW the FALLING VWAP, the old highs or bigger moving averages will give you the least risk event for engaging. Follow the candle trend until candles stop breaking lower. Removing your trade at visible support levels will allow you to participate in level-to-level trading – understanding that countertrend bounces can be swift and sharp but will likely fail under the broken structure of the market.

Here’s a link to the METASTOCK software– you can have your own copy of Metastock to run these tests and setups using Target Rich Trades.

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DAILY CHART

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